LEARNING OBJECTIVES: To develop an understanding of the basic concepts regarding the topics Fixed Assets and Depreciation, Provision for doubtful debts and Financial Statements QUESTION Following information is extracted from the books of a business concem on 30 June 2021. Particulars Rs. Particulars Rs. Opening stock 15,000 Net sades 65,000 Plant and Machinery 100,000 Bank charges 5,453 Accumulated depreciation and Machinery - Plant 20,000 Loan given to ABC Brothers. 40,000 Cash in hand 12,800 Capital 250,000 Cost of goods sold 2.5,000 Loan taken from bank 50,000 Creditors 54,000 Commission received 10,000 Sundry debtors 20,000 Return inwards 5,000 Bad debts 1,575 Carriage outwards 450 ADDITIONAL INFORMATION: In addition to the value of Plant & Machinery given in the above information, one machine costing to Rs. 30,000 was bought on 1" April 2021. Basis/Policy of charging depreciation is Time Proportionate (on the basis of use). Plant & Machinery is depreciated @ 10% per annum on straight line method. Provision for doubtful debts is to be maintained @ 5% Net loss for the period is Rs. 75,000. There is no closing stock found at the end of the accounting period Books of accounts are closed on 30" June each year. Required: Based on the above information, you are required to calculate the amount of: 1. Gross profit 2. Purchases 3. Net book value of Plant & Machinery.
LEARNING OBJECTIVES: To develop an understanding of the basic concepts regarding the topics Fixed Assets and Depreciation, Provision for doubtful debts and Financial Statements QUESTION Following information is extracted from the books of a business concem on 30 June 2021. Particulars Rs. Particulars Rs. Opening stock 15,000 Net sades 65,000 Plant and Machinery 100,000 Bank charges 5,453 Accumulated depreciation and Machinery - Plant 20,000 Loan given to ABC Brothers. 40,000 Cash in hand 12,800 Capital 250,000 Cost of goods sold 2.5,000 Loan taken from bank 50,000 Creditors 54,000 Commission received 10,000 Sundry debtors 20,000 Return inwards 5,000 Bad debts 1,575 Carriage outwards 450 ADDITIONAL INFORMATION: In addition to the value of Plant & Machinery given in the above information, one machine costing to Rs. 30,000 was bought on 1" April 2021. Basis/Policy of charging depreciation is Time Proportionate (on the basis of use). Plant & Machinery is depreciated @ 10% per annum on straight line method. Provision for doubtful debts is to be maintained @ 5% Net loss for the period is Rs. 75,000. There is no closing stock found at the end of the accounting period Books of accounts are closed on 30" June each year. Required: Based on the above information, you are required to calculate the amount of: 1. Gross profit 2. Purchases 3. Net book value of Plant & Machinery.
Chapter6: Investing And Financing Activities
Section: Chapter Questions
Problem 1M
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Transcribed Image Text:LEARNING OBJECTIVES:
To develop an understanding of the basic concepts regarding the topics Fixed
Assets and Depreciation, Provision for doubtful debts and Financial Statements
QUESTION
Following information is extracted from the books of a business concem on 30" June
2021.
Particulars
Rs.
Particulars
Rs.
Opening stock
15,000 Net sles
65,000
Plant and Machinery
100,000 Bank charges
5,453
Accumulated depreciation
and Machinery
Plant
20,000 Loan given to ABC Brothers.
40,000
Cash in hand
12,800 Capital
250,000
Cost of goods sold
25,000 Loan taken from bank
50,000
Creditors
54,000 Commission received
10,000
Sundry debtors
20,000 Return inwards
5,000
Bad debts
1,575 Carriage outwards
450
ADDITIONAL INFORMATION:
In addition to the value of Plant & Machinery given in the above information, one
machine costing to Rs. 30,000 was bought on 1" April 2021. Basis/Policy of
charging depreciation is Time Proportionate (on the basis of use). Plant &
Machinery is depreciated @ 10% per annum on straight line method.
Provision for doubtful debts is to be maintained @ 5%
• Net loss for the period is Rs. 75,000.
There is no closing stock found at the end of the accounting period
Books of accounts are closed on 30" June each year.
Required:
Based on the above information, you are required to calculate the amount of:
1. Gross profit
2. Purchases
3. Net book value of Plant & Machinery.
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